Public Accounts Committee on Feb. 20th, 2024

[Heather Jeffrey]

There is a sole-source justification on file, but there is no documentation of the initial contact with the company.

[Michael Barrett, Conservative, Leeds—Grenville—Thousand Islands and Rideau Lakes, ON]

Okay, so who contacted who? It's pretty straightforward. Either KPMG called you or you called KPMG.

[Heather Jeffrey]

There's no documentation on the file. They were chosen from a list of pre-qualified contractors—

[Michael Barrett, Conservative, Leeds—Grenville—Thousand Islands and Rideau Lakes, ON]

So you called KPMG.

[Heather Jeffrey]

—that was established by Public Services and Procurement Canada, PSPC, so PSPC—

[Michael Barrett, Conservative, Leeds—Grenville—Thousand Islands and Rideau Lakes, ON]

Called KPMG...?

[Heather Jeffrey]

—would have made the initial contacts with those companies to establish contracts with them.

[Michael Barrett, Conservative, Leeds—Grenville—Thousand Islands and Rideau Lakes, ON]

The Auditor General said:

While the first contract included milestones with clear deliverables and pricing, these were later amended and replaced with less-specific deliverables to allow for more flexibility. In addition, the agency did not set out specific tasks, levels of effort, and deliverables for these contracts in task authorizations.

Ms. Jeffrey, did Public Health reduce the deliverables required by KPMG, one of the largest firms in the world? Was there a reduction in the deliverables, yes or no?

[Heather Jeffrey]

There was no reduction in the deliverables.

[Michael Barrett, Conservative, Leeds—Grenville—Thousand Islands and Rideau Lakes, ON]

Okay. I'm going to turn to the Auditor General.

Madam, your report says the opposite of what the president of the Public Health Agency has just said. Should I quote your report again? You know what you said.

[Karen Hogan]

I can read it back to you.

There were deliverables, and the deliverables were then relaxed. They were very clear, and then they were made less specific in order to provide flexibility.

[Michael Barrett, Conservative, Leeds—Grenville—Thousand Islands and Rideau Lakes, ON]

Right.

We have the Auditor General, and I've read what she has written. She repeated what she wrote. What you've said, Ms. Jeffrey, is not consistent with that. The requirements of KPMG were relaxed by Public Health. It's one of the largest firms in the world, KPMG.

How is it that the government sets specific criteria and then goes back and creates less specific criteria? Why would the government want to do that? We know what the result is going to be: higher costs for taxpayers and less accountability for Canadians.

How can you possibly justify that?

[Heather Jeffrey]

I can say there was no reduction in the amount of work that was required for the deliverables. Yes, the categories of the work that was being done were broadened, and the Auditor General has pointed out that this meant they were less specific. However, that was done in response to a rapidly evolving pandemic. For example—

[Michael Barrett, Conservative, Leeds—Grenville—Thousand Islands and Rideau Lakes, ON]

The Auditor General also said that was not an excuse.

[The Chair, Conservative, John Williamson]

Mr. Barrett, I'm afraid that is your time.

I'll now turn to Ms. Bradford.

You have the floor for five minutes, please.

[Valerie Bradford, Liberal, Kitchener South—Hespeler, ON]

Thank you, Mr. Chair.

Thank you to the witnesses for being here today.

Ms. Jeffrey, the Auditor General has indicated, and you have also identified, that there was no agreement, framework or anything like that between your agency and Canada Border Services Agency.

Do you have any idea why it was the case that this was never established? We see the ramifications of that, but what are your thoughts as to why that never happened? Initially, it was PHAC that took the lead on this, so why would they not have been driving the ship on this?

[Heather Jeffrey]

The Auditor General has pointed to the necessity of having this kind of specific governance in place. I would say that a letter of intent was established when the app was required to be mandatory in July 2021. Initially, we were working in close collaboration with the Canada Border Services Agency at high speed, and at the time, a decision was not taken to slow that down to put in place the governance around it. That is something we very much regret and have corrected for our future pandemic preparedness and response.

It is very important to ensure that the responsibilities and accountabilities are itemized very clearly, precisely to prevent the kind of situation that the Auditor General has pointed out, where each department assumed that the other was taking some of this governance and putting it in place.

The Canada Border Services Agency was responsible for the development of the app, and the Public Health Agency of Canada was working to establish the public health measures, guidance and border operations that needed to be put in place with the corresponding policy, legal, privacy and other structures around the app's deployment.

While there was a de facto division of labour, that was not codified, and that is something we have now corrected going forward.

[Valerie Bradford, Liberal, Kitchener South—Hespeler, ON]

Has PHAC ever had to turn around a project as quickly as it did with the ArriveCAN app when going from a manual to a digital base? How long would such a transition normally be expected to take?

[Heather Jeffrey]

The Public Health Agency has never had to undertake operations of this nature, including at the border, as the pandemic required that response. I can't say exactly how long it would take, but there is very detailed and sequential governance around the development of IT projects. It would normally take years potentially to implement longer-term projects. In this case, they were undertaken on an emergency basis, but there still should have been documentation around that.

The reason it went forward so quickly was that some of those processes were relaxed given the emergency nature of the deliverables.

[Valerie Bradford, Liberal, Kitchener South—Hespeler, ON]

Ms. Hogan, in terms of the major problem that you've encountered in this report around the area of lax bookkeeping and record-keeping practices in terms of the ArriveCAN app, is there a similar instance in any previous reports that you've encountered?

Was there a laxness in any other reports?

[Karen Hogan]

Definitely my office has seen some similar failures in the lack of a governance structure or accurate and timely information. I think it's easy to point to the Phoenix pay system as an example of that. When it comes to failures at so many different layers, this is the first time I have definitely seen this. I think it's more than contracting. It was contracting, project management, IT management and bookkeeping. There were so many layers here.

The last comment I would make is that it's very common, when we look at horizontal projects, when more than one department is involved, to see that the lack of clarity of roles and responsibilities is often a contributing factor as to why certain horizontal initiatives are not well managed or delivered. I would point to those as some of the similarities.

[Valerie Bradford, Liberal, Kitchener South—Hespeler, ON]

Do you believe that the poor bookkeeping of records stemmed from a lack of internal knowledge surrounding the project or from the high use of external contractors?

I agree that, with the number of departments involved, it definitely complicates everything, for sure.

[Karen Hogan]

In this instance if you're talking about the record-keeping, I think it was the fact that many individuals didn't seek the many opportunities they had to seek extra clarity and specificity, whether it be in a contract, in a task authorization, in reviewing an invoice or in the time sheets that went with it. I think there are many instances when clarity could have been sought, which would have improved record-keeping.

When it comes to the other aspects, it speaks to the need to make it clear at the outset who's going to do what, so that you have clarity around who's going to be accountable for certain steps, whether they should be taken or not taken, and more importantly who's going to be accountable when it's all said and done to Canadians.

[The Chair, Conservative, John Williamson]

That is the time, Ms. Bradford.

Ms. Sinclair‑Desgagné for two and a half minutes, please.

[Nathalie Sinclair-Desgagné, Bloc, Terrebonne, QC]

I'll go back to Ms. Hogan.

I quote the beginning of your report, which says, “The agency was the business owner of ArriveCAN until 1 April 2022”.

Based on the documentation you saw, the Public Health Agency of Canada was therefore aware of the fact that there were a lot of contracts; it would normally have known that contracts were being submitted.

Did you find any documentation that would show that it was aware that GC Strategies had received about 130 contracts between 2020 and 2022? Did you find any evidence of that?